Bill Clinton's Book -- The Ideas On Trade Agreements
By Dave Johnson
December 2, 2011 - 3:20pm ET
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I've been taking a look at Former President Bill Clinton’s new book, Back to Work: Why We Need Smart Government for a Strong Economy. Part of the book discusses trade so it is interesting to see what he has to say now that we are living with the results of NAFTA, China's entry into the WTO and other trade agreements. Not nearly enough, unfortunately.
Clinton's book contains a number of ideas for creating jobs and improving the economy. Part I looks at where we are today as a country with our economic problems. He looks at the conservative anti-government movement, launches a defense of government and talks about the country’s debt and where it came from. Finally he compares this to how things are doing in other countries.
In Part II he details several policy ideas for reviving the economy, paying off the debt and creating jobs.
Idea number 27 is pass new trade agreements. Here is what he writes, in his own words:
27. Pass the pending trade agreements with South Korea, Colombia, and Panama. We don’t have a trade deficit in goods and services with the countries with which we have trade agreements. That’s because the negotiations are tough and thorough, designed to meet both sides’ needs, and supported by enforcement mechanisms. Our trade deficit is largely with the countries we buy oil from and the countries we borrow lots of money from, China and Japan.
He follows that up with idea 28, Enforce trade laws:
28. Enforce trade laws. We lost manufacturing jobs in every one of the eight years after I left office. One of the reasons is that enforcement of our trade laws dropped sharply. Contrary to popular belief, the World Trade Organization and our trade agreements do not require unilateral disarmament. They’re designed to increase the volume of two-way trade on terms that are mutually beneficial. My administration negotiated three hundred trade agreements, but we enforced them, too. Enforcement dropped so much in the last decade because we borrowed more and more money from the countries that had big trade surpluses with us, especially China and Japan, to pay for government spending. Since they are now our bankers, it’s hard to be tough on their unfair trading practices. This happened because we abandoned the path of balanced budgets ten years ago, choosing instead large tax cuts especially for higher-income people like me, along with two wars and the senior citizens’ drug benefit. In the history of our republic, it’s the first time we ever cut taxes while going to war.
Clinton says trade agreements are, "designed to increase the volume of two-way trade on terms that are mutually beneficial." But the book ignores that this is certainly not the way it is working out. It just advocates more trade agreements to boost exports. Boosting exports is good, but it doesn't address what happens when the balance shifts to imports.
Clinton is saying that Bush came in and refused to enforce the rules, letting other countries just grab the jobs. He has a point, Bush didn't enforce trade laws and we lost 40-50,000 factories and millions of manufacturing jobs while he was President. But I think Clinton still has way too much faith in the good intentions of America's corporate elite. He seems to believe that just opening up trade means that our corporate leaders will strive forth to compete fairly in a world that will compete fairly in return. He misses the way that the trade laws were used by our own corporations to sidestep democracy, moving our own jobs to places that do not have democracy, so people are unable to demand good wages and working conditions. Then they came back to our own workers and said, in essence, "shut up and take pay and benefit cuts or we'll just move your job, too, and you and your family will starve."
Free trade agreements were supposed to be about trade. As Clinton writes, trade is a two-way exchange that is mutually beneficial. Well instead we have the result of job loss, a downward wage and benefits spiral and a terrible, terrible trade deficit that has been and is draining our economy -- not so mutually beneficial.
Really, is closing a factory here, moving the machines and raw materials and supply chain to another country, and then bringing the same goods back and selling them in the same stores something that should be called "trade?" Of course not, and it should never have been allowed.
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